Your monthly Social Security retirement benefit is calculated using your highest 35 years of inflation-adjusted earnings, a specific formula, and your age when you begin receiving benefits.
The Social Security Administration (SSA) determines your retirement benefit by first calculating your average indexed monthly earnings (AIME) over your highest 35 years of earnings. These earnings are adjusted for inflation to reflect their value in today's dollars. Then, a formula is applied to your AIME to arrive at your primary insurance amount (PIA), which is the benefit you would receive at your full retirement age. Finally, your benefit amount is adjusted based on whether you start receiving benefits before, at, or after your full retirement age.
This information provides a general overview of how Social Security retirement benefits are calculated and does not constitute financial advice.
How can I get an official estimate of my Social Security retirement benefit?
You can obtain an official estimate of your Social Security retirement benefit by creating an account on the Social Security Administration's website, ssa.gov. Once logged in, you can access your 'my Social Security' account, which contains your Statement. This statement provides personalized estimates of your retirement benefits at different claiming ages (e.g., age 62, full retirement age, and age 70), as well as estimates for disability and survivor benefits. It is based on your actual earnings record to date and projections of future earnings.